Running head: ONLINE ASSIGNMENT ENTRY SYSTEM 1 ONLINE ASSIGNMENT ENTRY SYSTEM 7 OAES Assigned Questions Student’s Name: Course: Tutor: Date: 1-1: Explain why stewardship is an important concept Stewardship is an important concept in financial accounting that ensures that all the amounts received and paid together with the resulting amounts are accounted for. Business or a company is usually started by the shareholders who are suppliers of capital (Keiso et al, 2010). Stewardship helps to ensure that that the company’s finance managers are accountable to the shareholders and liability is reduced in turn. Stewardship helps ensure that cooperatives remains intact as none of the members is allowed to break out of a cooperative because for personal benefits. 1-2: What three traditional functions does accounting fulfill? The traditional function that accounting fulfills are identifying, measuring and communicating information to users of accounting information to help them make informed decisions regarding finances. Financial information is identified through double entry book keeping system which records financial transactions. Financial performance measuring is done through the records of loss and profits and other financial statements that indicate the financial status. Financial information is communicated through the creation of financial information. Accounting has generally made it easier to identify, measure, and communicate financial information to those who are in need of it such as the shareholders and investors. 1-3: What types of groups regulate financial accounting statements? financial accounting statements are regulated by the professional regulation bodies, company laws which states which set of information the financial statement can contain, the EU directives which requires that financial statements are prepared according to the international accounting standards by 2005, and the stock exchange regulations which contains the rules and regulations that govern financial statements. Professional regulation bodies, EU directives, company laws and stock exchange regulations are some of the groups that regulate financial accounting statements. 1-4: What is managerial accounting and how is it different from financial accounting? Managerial accounting is the process of identifying, measuring, analyzing and communicating financial information for the purposes of meeting the company’s goals. It entails all the activities and information intended to inform management of how the business is operating (Drury, 2013). Managerial accounting information is obtained from information relating to the costs of goods and services purchased by the company. The difference between financial accounting and managerial accounting is that managerial accounting provides both qualitative and quantitative information to b ...

1. Running head: ONLINE ASSIGNMENT ENTRY SYSTEM
1
ONLINE ASSIGNMENT ENTRY SYSTEM
7
OAES Assigned Questions
Student’s Name:
Course:
Tutor:
Date:
1-1: Explain why stewardship is an important concept
Stewardship is an important concept in financial accounting that
ensures that all the amounts received and paid together with the
resulting amounts are accounted for. Business or a company is
usually started by the shareholders who are suppliers of capital
(Keiso et al, 2010). Stewardship helps to ensure that that the
company’s finance managers are accountable to the
shareholders and liability is reduced in turn. Stewardship helps
ensure that cooperatives remains intact as none of the members
is allowed to break out of a cooperative because for personal
benefits.
1-2: What three traditional functions does accounting fulfill?
The traditional function that accounting fulfills are identifying,
measuring and communicating information to users of
accounting information to help them make informed decisions
regarding finances. Financial information is identified through
double entry book keeping system which records financial
transactions. Financial performance measuring is done through

2. the records of loss and profits and other financial statements
that indicate the financial status. Financial information is
communicated through the creation of financial information.
Accounting has generally made it easier to identify, measure,
and communicate financial information to those who are in need
of it such as the shareholders and investors.
1-3: What types of groups regulate financial accounting
statements?
financial accounting statements are regulated by the
professional regulation bodies, company laws which states
which set of information the financial statement can contain, the
EU directives which requires that financial statements are
prepared according to the international accounting standards by
2005, and the stock exchange regulations which contains the
rules and regulations that govern financial statements.
Professional regulation bodies, EU directives, company laws
and stock exchange regulations are some of the groups that
regulate financial accounting statements.
1-4: What is managerial accounting and how is it different from
financial accounting?
Managerial accounting is the process of identifying, measuring,
analyzing and communicating financial information for the
purposes of meeting the company’s goals. It entails all the
activities and information intended to inform management of
how the business is operating (Drury, 2013). Managerial
accounting information is obtained from information relating to
the costs of goods and services purchased by the company. The
difference between financial accounting and managerial
accounting is that managerial accounting provides both
qualitative and quantitative information to be used by managers
within the company to make decisions while financial
accounting gives a fair view of the company’s financial status
to various external parties.
2-1: Explain value based management and shareholder value

3. Value based management is the kind of management that aims at
maximizing shareholder and the idea of shareholder value
creation is the center of the company’s operations. The idea
directs the company’s strategies, structure, and processes and
also dictates the measures to be used to monitor performance
(Drury, 2013). The first step in value based management is to
come up with a strategy that would achieve a competitive
advantage and maximize the returns to shareholders.
Shareholder value is the value enjoyed by shareholders because
they have shares in the company thus has an advantage
whenever a company grows sales, earnings and free cash flow.
Increasing shareholder value increases the total amount of
shareholders equity section in the balance sheet.
2-2: What are some of the rights of shareholders in companies
today?
The rights that shareholders of company’s stock have may vary
from one place to another depending on the location of the
company but there are those common rights that hardly change
regardless of the location. Some of these common rights include
the right to share in company’s profitability, income and assets,
general meetings voting rights, rights to newly issued shares,
and the right to control and influence the company’s
management selection.
2-3: What is a financial audit?
Financial audit is the examination of the financial statements to
ensure that they meet the international set or company set
accounting criteria and standards. Auditing is done to check,
discover, verify and control some or other aspects in an
organization (Dutta, 2004). Financial audit is done by an
auditor, an individual who is authorized to examine and verify
accounts.
3-1: What elements or categories are on each of the financial

4. statements?
Some of the common elements in each of the financial
statements are assets, liabilities, equity, income and expense.
Assets can be tangible, intangible, cash and cash equivalent or
financial assets depending on the company. Assets have the
potential to contribute directly or indirectly to the cash flow and
this is the future benefit of having assets. Liability is the second
element in the financial statement which is just a duty that
pending to be performed and is likely to cost the company.
Equity is the amount that remains in the assets if the entity after
deducting all its liabilities. Income entails the revenues and
gains and finally the expenses which arise in the course of
ordinary activities of the entity and losses.
3-2: Which general ledger accounts would be affected by the
purchase of goods on credit for later resale?
The cash ledger because credit entries will be settled once the
goods are resold.
3-3: Which general ledger accounts would be affected by the
purchase of a computer for business on credit?
Payable ledger since credit entries are made in the payable
ledger.
3-4: How much does inventory change?
Inventory change= purchase of inventory- cost of inventory sold
= $15000 - $ 8000
= $ 7000
3-5: How much does payable change?

5. Payable change= purchase of inventory on credit – cash paid
back for credit supply
= $15000- $ 10000
= $ 5000
3-6: What is the change in receivables?
Change in receivables= sales of spare parts on credit- cash paid
bys customers
= $20000- $ 12000
= $ 8000
3-7: What is the change in net profit?
Change in net profit= sales on credit- cost of the spare parts
sold
= $ 20000- $8000

6. = $ 12000
3-8: How much does the bank account change?
Bank account change= cash paid by customers to account-
amount paid to supplier
= $12000-$10000
= $2000
References
DRURY, C. M. (2013). Management and cost accounting.
Springer.
Dutta, M. (2004). Cost Accounting: Principles And Practice.
Pearson/Education.
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2010).
Intermediate accounting: IFRS edition
(Vol. 2). John Wiley & Sons.